Brexit Fallout and a Brief History of Second Referendums

Passionate about the markets, the excitement, the story driving the markets at the time, the fundamentals and even the technicals.

Britain’s decision to quit the European Union (EU) by a margin of less than 4 percentage points shocked the world, which was widely expecting the Remain camp to prevail after polls showed growing momentum for continued EU membership. In the wake of the shocking results, more than 3 million British voters have signed a petition for a second referendum.[1]Signatories are demanding a restart in all EU polls with a majority under 60% and a turnout less than 75%.[2]

Outgoing Prime Minister David Cameron has categorically ruled out a second referendum, telling voters it is “not remotely in the cards.”[3] However, second referendums aren’t entirely out of the ordinary.

There are at least two recent occasions – the 1992 Maastricht Treaty in Denmark and the 2008 Lisbon Treaty in Ireland – where voters were made to vote again after a narrow referendum result. A slew of other referendums, including Greece’s Euro bailout and France’s 2005 plebiscite on the European Union constitution, were ignored all together.

Scotland has the biggest issue with the referendum result and is currently pursuing a second independence vote to remain in the EU. Scotland voted emphatically against leaving the EU by a margin of 62% to 38%. First minister Nicola Sturgeon recently said that Scottish parliament could block the passage of Brexit legislation. The first minister is currently exploring a suitable arrangement to keep Scotland part of the EU.

“If the Scottish parliament is judging this on the basis of what’s right for Scotland, then the option of saying we’re not going to vote for something that’s against Scotland’s interests, that’s got to be on the table. You’re not going to vote for something that is not in Scotland’s interests” she said.[4]

In reality, there is no process in the UK for the public to trigger a referendum or recall the results of an original plebiscite. While the government could in theory call a new referendum, the odds of this happening are seen as slim to none. Additionally, most of the country’s leading politicians have vowed to honour the results. Chief among them was David Cameron, who was one of the most vocal supporters of Britain’s continued membership of the EU.[5]

Britain’s withdrawal from the EU is expected to be long and complicated. There is no indication that the ruling Conservative government will invoke Article 50 of the Lisbon Treaty anytime soon. This critical piece of legislation must be triggered before the formal devolution process can begin. Political analysts suggest that it could take the remainder of Parliament for Britain to reach a new agreement with the UK. Other experts suggest it could take ten years for Brexit to fully materialize.[6]

[1] Camilla Turner and Michael Wilkinson (June 26, 2016). “As three million people sign a petition for a second EU referendum we ask – could it actually happen?” The Telegraph.

Forex.info is staffed by experienced financial industry experts dedicated and passionate about trading education and news. Our mission is to inform our readers of breaking market news, engage them with both data driven and entertaining articles, videos and media.

The information found on forex.info are intended only to be educational, is not advice nor a recommendation and thus should not be treated as such. We strongly recommend that you seek independent financial advice from a qualified and regulated professional, before participating or investing in any financial activities or services. Please be aware that trading derivative products on “margin” or with leverage, carries risk and may not be suited for everyone. Trading in these financial products can cause the loss of the entirety of your initial investment, please do not invest more than you can afford to lose. Opinions expressed at forex.info are those of the individual authors and do not necessarily represent the opinion of forex.info or its management.